February 8, 2023

Unitranche

Supportive Business Potential

2023 Cannabis Legalization Roadmap: What, When and Where

If you’ve been around the cannabis industry long enough, you’ve likely heard the saying that the cannabis industry ages in dog years. This is to say that one year in cannabis feels like seven (or more) in any other industry, due to the constant change and normalization of a newly legal industry.

The cannabis landscape across the U.S. has changed dramatically over the past 10 years since Washington and Colorado first legalized adult-use cannabis in 2012. More states have legalized both adult-use (21 states) and medical cannabis (39), creating a new, multibillion-dollar industry in just a few short years.

But with so much change in cannabis across varying state markets, it can often be hard to keep track of what is happening when and where. Below is a roadmap explaining where we’ve been and what’s ahead for the cannabis industry, as well as key dates and information to keep in mind in the New Year.

Dec. 1, 2022: Rhode Island Launches Adult-Use Sales

The Ocean State launched adult-use cannabis sales in the final month of 2022, becoming the 16th state to expand commercial access to cannabis for adults 21 and older. The opening of adult-use sales comes just over six months after Gov. Dan McKee signed the Rhode Island Cannabis Act on May 25.

When adult-use sales launched Dec. 1, five existing compassion centers were given the green light to commence sales with hybrid (medical/adult-use) retail licenses: Aura of Rhode Island (Central Falls), Thomas C. Slater Center (Providence), Mother Earth Wellness (Pawtucket), Greenleaf Compassionate Care Center (Portsmouth), RISE Warwick (Warwick).

“This milestone is the result of a carefully executed process to ensure that our state’s entry into this emerging market was done in a safe, controlled and equitable manner,” McKee said in a Nov. 22 announcement. “It is also a win for our statewide economy and our strong, locally based cannabis supply chain, which consists of nearly 70 licensed cultivators, processors and manufacturers in addition to our licensed compassion centers. Finally, I thank the leadership of the General Assembly for passing this practical implementation framework in the Rhode Island Cannabis Act, and I look forward to continuing our work together on this issue.”

Read more about the latest in Rhode Island cannabis here.

Dec. 29, 2022: New York To Launch Adult-Use Sales

After months of uncertainty, New York’s Cannabis Control Board (CCB) will in fact meet its self-imposed deadline to launch adult-use cannabis sales by the end of the year.

Housing Works Cannabis Co., located at Broadway and Eighth Street in Manhattan, will be the first New York adult-use dispensary to open its doors at 4:20 p.m. on Thursday, Dec. 29, the New York Office of Cannabis Management announced during a Dec. 21 board meeting.

“It is our goal to be the first,” Housing Works CEO Charles King told Spectrum News NY1. “We will not on the 29th have the build-out complete, but we will have a number of our display cases and cash registers up and be able to serve people.”

Housing Works Cannabis Co. is one of eight nonprofits CCB approved for a retail cannabis license in November, CBT reported. The company is the nation’s largest minority-controlled and largest community-based HIV/AIDS service organization, New York Gov. Kathy Hochul said in a press release.

“We set a course just nine months ago to start New York’s adult-use cannabis market off on the right foot by prioritizing equity, and now, we’re fulfilling that goal,” Hochul said. “The industry will continue to grow from here, creating inclusive opportunity in every corner of New York State with revenues directed to our schools and revitalizing communities.”

While Housing Works Cannabis Co. is the first New York dispensary to open, CCB regulators will ultimately grant 175 total retail licenses to as many as 150 individuals and 25 nonprofits.

“Today is a monumental day for New York’s nascent cannabis industry,” CCB Chair Tremaine Wright said in a Nov. 21 public statement. “With the first adult-use retail dispensary licenses in the hands of businesses and eligible nonprofits, we’ve ensured the first sales will be made at dispensaries operated by those impacted by the unjust enforcement of cannabis prohibition. This is just the start; we will continue to work to build an industry that is open to anyone who wants to participate. Many thanks to Gov. Kathy Hochul and her unwavering support as we all work to make sure New York has the most equitable and inclusive cannabis industry in the nation.”

Read more about the latest in New York cannabis here.

Jan. 10, 2023: Connecticut to Launch Adult-Use Sales

After Gov. Ned Lamont signed adult-use cannabis legalization into law in June 2021, many industry stakeholders in Connecticut hoped and anticipated adult-use sales would launch in the state before the end of 2022.

However, unlike neighboring Rhode Island, Connecticut was unable launch sales before the calendar turned to the New Year. The delay stemmed from Connecticut state law requiring 250,000 square feet of growing and manufacturing space to be approved for adult-use production before sales can begin. This, in turn, requires all four of the state’s existing medical cannabis producers to receive approval to serve the adult-use program and convert their facilities to be able to meet production needs.

Now that all four of the state’s cannabis producers—Advanced Grow Labs, Connecticut Pharmaceutical Solutions, Curaleaf, and Therplant —have been approved for adult-use production and have completed their conversion process, Connecticut will begin adult-use sales on Jan. 10.

Nine existing hybrid (medical and adult-use) dispensaries also completed the necessary steps to participate in the Jan. 10 sales launch and were notified by the state’s Department of Consumer Protection (DCP). Those retail operators are: Affinity, Bluepoint Wellness of Connecticut, Still River Wellness, Fine Fettle Dispensary – Newington, Fine Fettle Dispensary – Stamford, Fine Fettle Dispensary – Willimantic, The Botanist – Danbury, The Botanist – Montville, and Willow Brooke Wellness.

“I am proud of the hard work our team has done to meet the goal of opening adult-use sales in a safe, well-regulated market,” DCP Commissioner Michelle Seagull said in a press release. “We know that many people are excited to participate in this marketplace, whether as a business or a consumer, and we encourage adults who choose to purchase and consume these products to do so responsibly once sales begin on January 10.”

Read more about the latest in Connecticut cannabis here.

March 7, 2023: Oklahoma’s Special Election for Adult-Use Cannabis Legalization

Oklahoma voters will finally have their say on adult-use cannabis in March.

In October 2022, Republican Gov. Kevin Stitt declared a special election to be held on March 7, 2023, to allow voters to decide State Question 820, which would legalize adult-use cannabis in the Sooner State.

The special election comes after an initiative to place adult-use cannabis legalization on the November 2022 ballot was quashed when Secretary of State Brian Bringman’s office took longer than expected to verify petition signatures. That delay caused Oklahomans for Sensible Marijuana Laws (OSML), the group behind what has been dubbed the Yes on 820 Campaign, to miss the deadline to finalize the measure ahead of the November elections.

OSML submitted roughly 164,000 signatures—much more than the required minimum of 94,911 signatures—to Bringman’s office on July 5, 2022. OSML was told the verification process would take two to three weeks, “which was historically how long it had taken to manually count signatures,” according to the state’s Supreme Court ruling, but a slow signature count caused OSML leaders to miss the Aug. 26 deadline to finalize the ballot measure.

But now, thanks to Stitt’s declaration of a special election, voters in Oklahoma will make their decision on whether to legalize adult-use cannabis.

The measure would authorize the Oklahoma Medical Marijuana Authority (OMMA) to administer and enforce the law and would impose a 15% excise tax on adult-use sales, above applicable taxes. That excise tax revenue will fund the law’s implementation, with any surplus directed to public schools to address substance abuse and improve student retention, as well as to the General Revenue Fund, drug addiction treatment programs, courts, and local governments.

“After all the delays caused by the new signature count process, we are excited to finally be on the ballot on March 7, 2023, so that Oklahomans can experience the benefits of the State Question without further delay,” Yes on 820 Campaign Director Michelle Tilley said in a public statement. “We are grateful the voices of over 164,000 Oklahomans who signed the petition and want to vote on legalizing recreational marijuana for adults in Oklahoma have been heard.”

Read more about the latest in Oklahoma cannabis here.

Sometime in 2023: Missouri Could Launch Adult-Use Sales

Cannabis is now legal in the Show-Me State after voters approved Amendment 3 at the polls this past November, becoming the 21st state to legalize cannabis.

The measure allows Missourians 21 and older to possess up to 3 ounces of cannabis flower or an equivalent amount in other forms, establishes a lottery for adult-use licenses, allows for home cultivation of up to six mature cannabis plants (with no more than 12 mature plants per residence), imposes a 6% sales tax, and more.

Cannabis possession became legal in Missouri beginning Dec. 8, 2022, which is the same day the state’s Division of Cannabis Regulation (DCR) began accepting requests from existing medical cannabis operators to convert to “comprehensive” facilities to be able to serve both markets. Those who intend to cultivate cannabis at home, meanwhile, can apply for noncommercial licenses beginning Feb. 6.

Just two days after voters approved constitutional Amendment 3, the Missouri Department of Health and Senior Services published the first draft of program rules on Nov. 10. DCR sought feedback on the draft rules through Nov. 25, with final rules for the state’s adult-use cannabis program to be filed in February.

While it remains unclear when exactly adult-use sales could launch in Missouri, it appears the state is focused on the task at hand.

“With the passage of Amendment 3, the Department will quickly make adjustments to the existing medical marijuana program while implementing a new adult consumer program,” DCR said in a release on their website. “The Department has planned for these changes. As was the case in implementing the medical marijuana program, the Department will accept and carefully consider public input on how the new law should be implemented in Missouri.”

Read more about the latest in Missouri cannabis here.

July 1, 2023: Cannabis Possession Becomes Legal in Maryland

Now that cannabis is legal in Maryland after voters approved Question 4 in the November election, it’s only a matter of time until the state’s adult-use cannabis program comes to fruition.

While ambiguity remains around when licenses will be awarded, when regulations will be released, and when sales will launch, cannabis possession becomes legal in the Free State beginning July 1, 2023. The state’s cannabis program will be run by the Maryland Medical Cannabis Commission, which has not issued any recent updates.

Question 4 passed in Maryland by a 65.4% to 34.6% margin, officially making Maryland the 20th state to legalize adult-use cannabis. Medical cannabis has been legal in the state since the passing of House Bill 881 in 2014.

The approval of Question 4 allows for adults 21 and older to purchase and possess up to 1.5 ounces of cannabis, 12 grams of concentrate, 750 milligrams of delta-9 THC or two plants for personal use.

“For Marylanders, legalization will further stimulate the state’s economy, create good-paying jobs, reconcile long-standing racial inequities, and generate tax revenue for vital community investments, while significantly expanding access to the therapeutic benefits of cannabis,” said Wendy Bronfein, co-founder, chief brand officer and director of public policy for Maryland-based Curio Wellness. “We look forward to bringing our market-leading suit of products to all Marylanders next year.”

In more positive news for Maryland’s cannabis industry, newly elected Gov. Wes Moore has been a past advocate of cannabis legalization, with a specific focus on creating an equitable industry in the state.

“We cannot talk about the benefits of legalization if we’re also not dealing with the consequences of criminalization,” Moore said in an Oct. 12, 2022, gubernatorial debate with Republican candidate Dan Cox. “We’ve seen inside communities—particularly Black and Brown communities that have been disproportionately harmed—that we have to focus on things like automatic record expungement for those who have cannabis convictions. We have to focus on things like being able to deal with the pardoning of people who have criminal records for something that is now a burgeoning industry in the state of Maryland.” 

Read more about the latest in Maryland cannabis here.

Nov. 2023: Ohio (Again) Pushing for Adult-Use Cannabis Legalization

Cannabis advocates in Ohio had their 2022 adult-use legalization campaign suspended by a lawsuit, but the buck(eye) doesn’t stop there.

There are currently two initiatives seeking support to legalize adult-use cannabis in Ohio: The Ohio Marijuana Legalization Initiative, backed by the Coalition to Regulate Marijuana Like Alcohol, and House Bill 382, introduced by state Reps. Casey Weinstein, D-Hudson, and Terrence Upchurch, D-Cleveland.

The adult-use legalization initiative has been cleared for signature gathering to qualify for the November 2023 ballot, CBT reported. The campaign has until about the end of January to get the 130,000 signatures needed to put the initiative on the 2023 ballot, according to a Cleveland.com report.

CRMLA has been down this road before. In December 2021, the Coalition submitted 206,943 signatures—much more than the required 132,877 signatures required—to Ohio Secretary of State Frank LaRose. In early January 2022, LaRose announced his office rejected more than 87,000 of those signatures, leaving the petition effort short by 13,062 signatures, which led to the lawsuit filed by CRMLA against Ohio GOP leadership.

The adult-use legalization proposal would legalize cannabis purchasing and consumption for adults aged 21 and older while also creating a new state regulatory agency, the Division of Cannabis Control. It would also levy a 10% sales tax on adult-use cannabis sales, with tax revenue distributed among several entities, including a social equity fund, a substance abuse and addiction fund, and municipalities that host cannabis businesses.

CRMLA says it will continue to collect signatures to qualify the measure for the November 2023 ballot.

“We expect that we’ll be able to do it,” Tom Haren, an attorney working on the campaign, told Cleveland.com. “We’ll have staff get ready. Our intention is to give Ohio voters an opportunity to weigh in if the General Assembly continues to ignore them.”

H.B. 382, meanwhile, was heard by the Ohio House Finance Committee on Dec. 6, just before the legislative session adjourned Dec. 21.

Under H.B. 382, consumers would be able to possess up to 5 ounces of cannabis and 15 grams of concentrates. The proposal would also create a cannabis regulatory agency within the Ohio Department of Commerce to oversee licensing for cultivators, processors, retailers and testing laboratories, while also levying a 10% tax on retailers’ gross sales. The revenue generated from that tax would be divided among road and bridge maintenance (35%), K-12 education (35%), as well as funding for dispensary-friendly municipalities.

Furthermore, the legislation also mandates $20 million to be allocated in the program’s first two years to clinic trials and research towards cannabis treatment options for veterans

“Our state is actively losing dollars to neighboring states with recreational programs and missing out on hundreds of millions of dollars in potential tax revenue,” Weinstein said at the Dec. 6 hearing, according to NBC 4.

Read more about the latest in Ohio cannabis here.

Jan. 1, 2024: Virginia to Launch Adult-Use SalesMaybe

Virginia’s adult-use cannabis program is in limbo, to say the least.

On April 7, 2021, the Virginia General Assembly approved then-Gov. Ralph Northam’s proposal to amend the state’s bill to legalize adult-use cannabis in 2024. Under the amendment, cannabis possession and home cultivation became legal in Virginia on July 1, 2021, but retail sales aren’t scheduled to launch until Jan. 1, 2024.

However, given a change in the state’s political leadership—Republican Glenn Youngkin was elected Governor in November 2021 and assumed office January 2022—along with the challenges of jumpstarting a new industry, questions remain as to whether cannabis sales will actually launch at the beginning of 2024. 

The 2021 legislation established a Cannabis Control Authority (CCA), which is responsible for granting, suspending or revoking licenses. The CCA may award licenses to up to 450 cultivators, 400 retailers, 60 manufacturers and 25 wholesalers. However, as CBT reported, those license classifications were not codified in 2021 and, when the General Assembly had the chance to codify them in 2022, they failed to do so.

“Half the bill is basically just dead. It didn’t get enacted,” Ngiste Abebe, vice president of public policy at multistate cannabis operator Columbia Care, told CBT. “There are folks who’ve talked about, like, ‘They have to start [adult-use] sales in 2024.’ And they don’t actually. If they don’t have any license types that are codified, and regulations aren’t promulgated, then you can’t actually start sales in 2024. You need a lot more than one sentence to get that done.”

Under current Virginia law, adults 21 and older can legally possess up to 1 ounce of cannabis and home grow up to four plants per residence. When Virginians might be able to purchase that cannabis at a state-legal dispensary, however, remains to be seen.

Virginia’s General Assembly will reconvene in January 2023, and time will tell if lawmakers expedite the process to roll out the state’s adult-use program.

Read more about the latest in Virginia cannabis here.